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Thursday, April 2, 2015

The exaggeration against Najib

Tun Dr Mahathir Mohamad has raised many issues against Prime Minister Najib Tun Razak and has said that these issues are going to result in Barisan Nasional losing the next general election.

I do not want to comment about what Dr Mahathir said regarding Sirul Azhar Umar because this is basically a legal issue and involves the matter of his extradition from Australia and so on. I would, however, like to reply to the other two issues that Dr Mahathir raised, 1MDB and the new private jet.

The Special Branch has warned that Malaysia faces the risk of a terrorist attack, specifically from IS. If this is true then the security of the Prime Minister and DYMM the Agong cannot be taken lightly -- hence the need for suitable and efficient transportation for both the Prime Minister and the Agong.

Security cannot be considered only in terms of money. Of course security costs money and it is the same all over the world, especially in these very troubling times.

TUN M

It costs more than RM5 billion a year for the security of the US President and his family. By the time he leaves office, the security of the President would have cost the US taxpayers more than RM40 billion.

When the President travels he is obliged to take Air Force One and it costs more than RM700,000 an hour to run that plane. The President’s ten-day trip to India, Indonesia, South Korea and Japan cost RM32 million just for Air Force One alone while the trip to Portugal for the Nato conference cost RM10 million.

In fact, Obama’s dog handler is paid over RM360,000 a year while the other 226 members of Obama’s staff are each paid RM300,000-400,000 a year.

Such is the cost of security for the heads of state. Even the security of the British Royal Family costs the UK taxpayers a quarter billion ringgit a year.

Members of the British Prime Minister's protection unit earn as much as RM500,000 a year. The total that Tony Blair cost the UK taxpayers was RM34 million a year back then, although that has been reduced somewhat today. The 20 officers who were assigned to protect Blair costs RM2.5 million a month.

I am not saying that since it costs a lot of money to protect the UK Prime Minister and the US President then this justifies doing the same. The point I am making is that security is not cheap and security here includes proper transportation for the heads of state such as the Prime Minister and Agong.

Now, on the 1MDB issue.

Singapore has its Temasek Holdings, which was formed more than 40 years ago in 1971. Malaysia has its 1MDB, which has just started and needs time to prove its viability.

Temasek, after more than 40 years, is of course already profitable and has invested in all sectors of the economy. Its total portfolio is more than RM600 billion. Last year alone Temasek invested a further RM65 billion while it divested RM27 billion. Its Total Shareholders Return (TSR) for last year was 1.5%, 9% for the last ten years, and 16% since it started business.

Would you consider Temasek a bad investment with such returns compared to the amount of money the Singapore government has invested in it?

Another criticism of Dr Mahathir is the alleged involvement of businessmen Jho Low in 1MDB. I remember back when Dr Mahathir was Prime Minister and he was criticised about Ananda Krishnan’s involvement in Petronas and was also criticised about the appointment of his friend, Daim Zainuddin, as the Finance Minister.

When asked about this Dr Mahathir gave a classic reply. He said of course he would appoint his friends who he can trust. Who would appoint their enemies?

Nevertheless, the issue of friends or not is not the issue to be debated. It is whether in the long run 1MDB can be proven viable like Temasek has over more than 40 years, although the returns may be as modest as that of Temasek.

Investments are not meant for quick profit. They are meant for the long term so that the next generation will have something to look at after the oil has run dry. And this, too, is what oil-rich countries in the Middle East are doing.